Meat, fish & poultry heat up as temperatures rise

04/07/2017

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The Meat, Fish and Poultry (MFP) market has returned to value and volume growth in the 12 weeks ending 18th June 2017. Volume growth has returned to all of the macro categories, with advances seen in both primary and processed meat and poultry. Inflation is playing a role in the market, but is still lagging behind the price growth in the wider grocery market. Continuing the trend of recent months, chilled fish is seeing the sharpest price rises, but volumes remain robust even in the sub-categories most affected by inflation.

Nathan Ward, Business Unit Director for MFP explains: “Chilled fish remains in strong growth despite price rises in the category. Inflation continues to contribute a large part of the value growth we are seeing, but rising prices aren’t as yet affecting volume, and shoppers made 2.1 million more trips to buy chilled fish year on year.

“Added value fish and shellfish are vital to volume growth in chilled fish, as they are growing ahead of the market. Natural fish has seen volumes stabilise; prices have risen 12%, and a drop off in the number of shoppers is offset by them buying a little more each. Salmon has been affected significantly by price rises; natural salmon is up £1.70 per kilo year on year, whilst smoked salmon has seen prices rise by a quarter – up £5.13 per kilo - sending volumes down 16% this year.”

Ward continues, “Smoked salmon price rises aren’t just affecting those on low incomes. ABC1s are cutting back at the same rate those with less disposable income, resulting in 440,000 fewer shoppers compared to last year. There is clearly a limit for consumers when it comes to inflation and some categories will be heavily affected by price hikes.”

The great weather in late May and early June has helped to drive stronger performance for primary and processed meat and poultry. Lamb looks to be performing well, but this is a result of the phasing of Easter and looking across the year, value is down 6%. Chicken is now clearly the dominant protein in primary meat and poultry, seeing almost double the sales of beef (by volume) in the latest 12 weeks. Chicken is still seeing value and volume growth, with prices decreasing as retailers focus on everyday low prices.

Processed meat and poultry is seeing faster growth than primary, which is unsurprising given the sunny weather which put BBQs high on the agenda for shoppers. But the beneficiaries of this are not just the traditional BBQ categories, with processed poultry also in value and volume growth. Another big headline is the strong performance from bacon which has struggled across the year, but is seeing stronger growth in the latest period. We’re taking 1.5 million more shopping trips for bacon compared with last year, and this is driving category growth. Prices are up as promotions continue to fall back, and full price sales now account for two thirds of sales. The resurgence of sausages continues with a return of Y for £X promotions helping to drive bigger trips.

With the heatwave in late June falling into next month’s update, it looks likely we’ll be reporting more positive news for our categories in four weeks’ time.